Phone: 256-927-7490

Scams to watch out for

Apr 04

People often come into the office with notices regarding lotteries they have won, or money that is reportedly being held for them from an unknown rich deceased relative’s estate. Much to their disappointment, these people find out that these are scams. This week and next, I will list some of the more common scams to watch out for, all of which are geared to either steal your money or identity.

Sweepstakes, lottery, and “money holding” scams. These scams come in all shapes and sizes, but the bottom line is almost always this: You’ve won, inherited, or are being asked to hold a whole lot of money, but in order to claim it you have to send a smaller amount of money back to the people from which you received the notice. These kinds of scams often use foreign royalty, celebrities or other famous names to make their offer seem more genuine. If it’s a sweepstakes or lottery notice, and you aren’t sure, don’t click on the link but instead go directly to the homepage of the company mentioned. If they are really giving away $1 million, there will be some kind of announcement on their website. If the notice is from a person from another country asking you to hold money for them, just ignore it.

The “secret shopper” scam. There are a lot of “secret shopper” scams, work-from-home scams, and other phony job offers out there.  Emails, websites and online applications all look very professional, and the candidate is even interviewed for the job (usually over the phone) and then receives an offer. In order to start the job, however, the candidate has to fill out a “credit report” or provide bank information for direct deposit of their “paychecks.” These forms are nothing more than a way to capture sensitive personal data – Social Security number, bank accounts, etc. – that can easily be used for identity theft. And, of course, there is no job.

Check cashing scams. Legitimate companies like Craig’s List and Western Union are used for an inordinate amount of scamming these days — especially check cashing scams. Here’s how it works: Someone contacts you via a Craig’s List posting, maybe for a legitimate reason like buying your old couch or perhaps through a scam like hiring you as a secret shopper. Either way, they send you a check for more than the amount they owe you, and they ask you to deposit it into your bank account and then send them the difference via Western Union. A deposited check takes a couple of days to clear, whereas wired money is gone instantly. When the original check bounces, you are out whatever money you wired…and you’re still stuck with the old couch.

“Debt relief service” scams. In challenging economic times, many people are looking for help getting out of debt or staying out of foreclosure. Unfortunately, almost as many scammers appear to take advantage of these desperate situations. Because the federal government announced or expanded several mortgage relief programs recently, all kinds of sound-alike websites have popped up to try to fool consumers into parting with their money. Some sound like a government agency, or even part of the Better Business Bureau or other nonprofit consumer organization. Most ask for an upfront fee to help you deal with your mortgage company or the government (services you could easily do yourself for free), and almost all leave you in more debt than when you started.

“Phone cramming.” This is a relatively new scam that has arisen out of the nation’s expanding use of texting. The phone cramming scammer sends a strange, sometimes nonsensical, text through an undisclosed number. A second text then arrives with instruction that if you would like for these type texts to stop, all you have to do is reply “STOP.” What you are really doing when you reply is authorizing bogus charges on your phone bill that go straight to the scam artist. If you receive a strange text from an undisclosed number, or someone you don’t know, and the ask you to reply — don’t.

Last week we discussed several scams to be wary of. Here are a few more internet based scams to look out for.

“I need your sensitive information” scams. There are a million ways to steal someone’s identity. Usually, someone will call or email you saying there is some huge mix-up that requires you to immediately give out some sort of sensitive, personal information. Many times these scammers represent to be your bank. A new variation of this scam has become so prevalent that many hotels are posting warnings in their lobby. Here’s how it works: You get a call in your hotel room in the middle of the night. It’s the front desk clerk, very apologetic, saying their computer has crashed and they need to get your credit card number again, or they must have gotten the number wrong because the transaction won’t go through, and could you please read the number back so they can fix the problem? Scammers are counting on you being too sleepy to catch on that the call isn’t from the hotel at all, but from someone outside who knows the direct-dial numbers for the guest rooms. By the time morning rolls around and you are clear-headed, your credit card has been on a major shopping spree. Bottom line – never give out information about yourself unless you are absolutely sure who you are giving it to.

Social network scams. On the Internet, it’s easy to pretend to be someone you are not. Most likely we are not really friends with all 897 of our “friends” on Facebook. With so much information about us online, a scammer can sound like they know you. The most recent version of this scam appeals to our natural curiosity by appearing to be a message from a friend. Viral videos claiming to show everything from footage of Osama bin Laden’s death to the latest celebrity hijinks to even videos of you doing unspeakable things have shown up on social media sites often looking as if they have been shared by a friend. When you click on the link, you are prompted to “upgrade your Flash player,” but the file you end up downloading contains a worm that logs into your social media account, sends similar messages to your friends, and searches for your personal data. The next time you see a sensational headline for the latest viral video, resist the urge to open it.

Penny auction scams. Sales scams are as old as humanity, but the Internet has introduced a whole new way to rip people off. Penny auctions are very popular because it seems like you can get something useful – cameras, computers, etc. – for way below retail. But you pay a small fee for each bid (usually .50 to $1.00) and if you aren’t the winner, you lose that bid money. Winners often are not even the top bidder, just the last bidder when time runs out. Although not all penny auction sites are scams, some are being investigated as online gambling. If you engage in penny auctions, treat them the same way you would legal gambling in a casino – know exactly how the bidding works, set a limit for yourself, and be prepared to walk away before you go over that limit.

“Phishing” scams. Hundreds of thousands, perhaps millions, of people have gotten emails that very much look like an official notice from a legitimate business like the Better Business Bureau. The subject line says something like “Complaint Against Your Business,” and the instructions tell you to either click on a link or open an attachment to get the details. If you do either, a malicious virus is launched on your computer that can steal banking information, passwords and other critical pieces of information needed for cyber-theft. Anyone who has opened such an attachment should run a complete system scan using reputable anti-virus software. If your computer is networked with others, all machines on the network should be scanned, as well.